At long-run macroeconomic equilibrium,
A) an inflationary gap exists.
B) real GDP equals potential GDP.
C) a recessionary gap exists.
D) real GDP is less than potential GDP but is as close as it is possible to be.

Question

Quizplus · Accepted Answer

At long-run macroeconomic equilibrium, real GDP equals potential GDP, meaning the economy is producing at its full capacity without generating inflationary pressures.

At Long-Run Macroeconomic Equilibrium